How To Buy Gold With Bitcoin?

Introduction

Even though the idea of a cryptocurrency without a central authority was conceived in 1998, it took another 11 years before the first digital currency based on a decentralized payment network was created. That currency is known as bitcoin. You will be surprised to learn what you can buy with bitcoin in today’s market as well as how it evolved into an international currency. Over thirteen million people have started using the new electronic currency since it was first introduced in 2009. These people use it to send and receive payments, as well as make purchases.

Because of the many benefits it offered, bitcoin quickly became a popular payment method, and it was quickly adopted by a wide variety of businesses all over the world, including dealers in bullion and precious metals. Before you buy gold using bitcoin, you should be aware of the fact that bitcoin is still in its early stages of development and that there are a lot of things you should know and understand about this form of payment.

WHAT DOES BITCOIN STAND FOR?

Both a cryptocurrency and an electronic payment system, Bitcoin was first made available to the public in 2009 in the form of open-source software. Bitcoin is a form of virtual currency that is under the control of cryptography and is produced using a combination of mathematical algorithms, computer science, and electrical engineering. Because all Bitcoin transactions take place directly between two users and do not involve a third party, the cryptocurrency is often referred to as the first decentralized digital currency. The system is P2P, which stands for peer-to-peer. The Blockchain is a public distributed ledger that contains a record of all business transactions and amounts transacted using Bitcoin. Network nodes are responsible for verifying and recording Bitcoin transactions.

HOW DOES THE BITCOIN SYSTEM WORK?

“Mining” is a competition in which users offer their computing power for the purpose of verifying and recording bitcoin transactions into a new block in the Blockchain. As a reward for participating in this competition, users are rewarded with bitcoin, which is then distributed to other users. Users who are successful in mining are rewarded with newly created bitcoins as well as a portion of the transaction fees.

PROS & CONS OF BITCOIN PAYMENTS

Bitcoin payments have become so appealing, with an average of about 250,000 transactions taking place each day, that an increasing number of people and businesses are beginning to use it. If you are curious as to why payments made using bitcoins have gained such widespread acceptance, consider the following benefits:

PROS:

Convenience: If you have a bitcoin wallet, you can send payments and make purchases from virtually any location on the planet because all transactions are completed online.
Freedom: the bitcoin system gives users total control over their finances because there are no restrictions, no limits, and no holidays.
Because there are no middlemen involved, the settlement time for a bitcoin transaction is significantly shorter than the time it takes for other types of payments to be processed.
Security is ensured by the use of bitcoin because transactions are never linked to the user’s personal identity and cannot be linked back to the user. This makes it impossible to steal someone’s identity using bitcoin. Additionally, there are additional means of bolstering the level of protection (encryption and backup).
Bitcoin is a decentralized digital currency that can be used to buy goods and services from merchants all over the world. Because bitcoin is a global currency, there is no need to convert the currency’s value before making a purchase.
Transaction fees are extremely low, and they are not proportional to the amount spent or received when using bitcoins.
When calculating equivalents in bitcoin, you can go up to eight decimal places (one-hundredth millionth of a bitcoin). It is anticipated that the number of decimal places that can be used in bitcoin will increase in the future.
The cryptographic infrastructure that the bitcoin protocol is based on is significantly more secure than the technology that is used by banks and credit card companies.

The benefits that come with using bitcoin as a form of payment are extensive. Nevertheless, as is the case with all methods of monetary exchange, there are some dangers and drawbacks associated with it:

CONS:

Rate of exchange that is highly unpredictable — ever since its inception, the value of bitcoin has been subject to various price fluctuations more frequently and significantly than any other form of currency. Because of this, keeping savings in bitcoin is not something that is advised to do at this time; however, it is anticipated that the volatility will decrease over time.
Irreversibility — Transactions using bitcoin are both instant and irreversible, and as a result, they can never be undone. Nevertheless, depending on the Refund Policy of the individual or organization that received the payment, transactions may be reversed or refunded.
All Bitcoin transactions are public, can be traced back to their source, and are permanently stored on the Bitcoin network using the user’s Bitcoin address as the identifier. Therefore, anyone can see all transactions and the balance of any address, and because of this, it is recommended to create several addresses or wallets in order to protect one’s privacy. Wallets are digital storage locations for digital currency.

Is it risky to put money into Bitcoin? Can you buy gold with Bitcoin? How do you actually use Bitcoin? The answers to these questions and a few others are provided further on in this article.

When it first appeared on the market, cryptocurrencies, and Bitcoin in particular, had a long way to go before reaching their current state. Bitcoin and many other cryptocurrencies are now widely used as electronic currencies, despite the fact that many people are still unclear about how the Blockchain mechanism works.

You can now make online purchases, investments, and trades using Bitcoin, in addition to sending and receiving payments through the digital decentralized banking system.

What Is Bitcoin?

The decentralized ledger technology known as Blockchain underpins the operation of the cryptocurrency known as bitcoin. In its most basic form, a Bitcoin is a piece of digital data that is kept in a digital wallet that is hosted on a remote server. Bitcoin can be used for a wide variety of transactions, including investments, payments, and hotel reservations.

Because there is no central authority or financial institution involved in any of the transactions that take place using bitcoin, the system is referred to as the first decentralized form of banking to ever come into existence.

2017 was a year in which the value of cryptographic currencies increased to the thousands. Because of this, a lot of people even buy bitcoin to use as an investment.

Is It Possible to Purchase Gold Using Bitcoin?

Yes! You are able to purchase gold with Bitcoin. Since its inception in 2009, Bitcoin has experienced significant development, as was mentioned earlier. You can now use the digital currency for a variety of purposes, including the purchase and trade of bullion and other precious metals. This is despite the fact that its functionality was virtually unknown in the initial years after it went live.

In point of fact, in recent times, a growing number of investors have been selling their bitcoin holdings and reinvesting the proceeds in the purchase of gold. Bitcoin is being accepted by an increasing number of bullion trading companies, which means that customers now have another payment option available to them.

Why Would You Want To Divest Of Bitcoin?

The economy has experienced a downturn as a direct result of the pandemic. In point of fact, economists forecast that a global recession is likely on the horizon for the world economy.

When faced with unforeseeable circumstances, such as the one caused by COVID19, investors evaluate the historical performance of their investments to determine whether or not they should keep their holdings or sell them in order to minimize losses.

In the midst of the pandemic, investors are selling their bitcoin holdings and moving their money into safer assets such as gold for a variety of reasons.

VOLATILITY

Bitcoin is known for its extremely unpredictable price swings. In point of fact, the price of bitcoin displayed an unprecedented 8% volatility rate between the years 2017 and 2018, which is a record high for the cryptocurrency.

The high rate of volatility can be attributed, at least in part, to the fact that the value of bitcoin is contingent upon the number of investments made in the cryptocurrency, which is directly related to the value that people assign to it.

SECURITY

At the moment, investors are concentrating their efforts on protecting their holdings in order to cut down on the amount of money they stand to lose during the current economic downturn.

The volatile price and value of bitcoin do not provide much in the way of investment security because of their nature.

Is It Possible to Trade Bitcoin for Gold Using the Internet?

The acceptance of Bitcoin increased along with its functionality as its popularity and value increased.

You can either use it to make investments or trade it for a wide range of other cryptographic currencies. It can be used as a form of online banking or payment in addition to being a form of currency. You can even use it to buy gold online using the internet.

In point of fact, a growing number of investors are turning to bitcoin as a means of purchasing gold in order to reduce the amount of money they stand to lose from their investments as a result of the ongoing economic downturn.

Gold is an asset that is considered a safe haven due to its extremely low price volatility rates, fixed worth, and consistent demand in the market.

How Can Bitcoin Be Used To Purchase Gold?

Buying gold with bitcoin is a straightforward and uncomplicated process. From the very beginning to the very end, there are three steps involved in the process.

Create a wallet for your bitcoins.

You are required to acquire a web or mobile application that gives you the ability to manage your cryptocurrency before you can make purchases with Bitcoin or use Bitcoin to buy gold.

Keep in mind that support for bitcoin is not included in all applications. You will need to go to Bitcoin.org in order to find a list of websites and services that are compatible with bitcoin.

Be sure to do your homework and select an option that is safe and secure, with adequate protection and antivirus software already installed, before you sign up for anything.

BUY BITCOIN

You can get Bitcoins by transferring them from your bank account or your debit or credit card.

The purchase of bitcoins can even be done with cash or through exchange platforms. You can get paid in Bitcoin by other people who have Bitcoin wallets, and you can use the bitcoin that you get paid in to make further purchases or payments.

Be sure to store the Security key and Bitcoin address safely after creating your account. You will receive these when the account is created. You will need it in the future to complete transactions. Do keep in mind that not all transactions involving Bitcoin are completed instantly.

Because the system conducts background checks to ensure authenticity and to keep user information safe and secure, the processing of some requests could take as long as a day or two.

BUY GOLD

After the funds have been transferred to your Bitcoin wallet, you will be able to use them to make online purchases of gold. You can buy gold from a number of different bullion trading companies using cryptocurrencies like Bitcoin and others. These businesses are plentiful.

Even if they don’t accept other cryptocurrencies, you can still buy bullion with them if you exchange them for Bitcoin first and then use that Bitcoin to buy the bullion.

Choose the Bitcoin payment method at checkout after adding as much gold as you desire or are able to buy into your shopping cart. There are two different approaches to finishing the transaction.

You have two options: you can either scan the QR code, at which point the invoice will be sent to your wallet, or you can approve it to finish the transaction.

You also have the option to scan the invoice and upload it to your wallet. After that, you will need to fill in the payment amount and send it to the Bullion Trading Exchange so that the payment process can be finalized.

Both payments are made entirely online, and it could take anywhere from 12 to 24 hours for the transaction to be finalized. It is imperative that you move quickly in this situation as the invoice will only be viewable for 15 minutes after the transaction has taken place, and you will need to initiate the fund transfer within that time frame in order to successfully close the deal.

In most cases, you will be required to wait for six confirmation blocks before you can be certain that your payment will not be reversed. As was just stated, it usually takes about twenty-four hours to obtain the six confirmation blocks that denote the successful conclusion of a transaction.

You will also need to keep in mind that buying bullion with Bitcoin will incur additional fees, either for the transaction itself or for the processing of the purchase.

The prices are different depending on the company you buy from and the cryptocurrency you use to make the purchase. Before you make the purchase, you need to make sure that you check out the transaction and processing rate so that you can make the purchase appropriately.

Few Other Benefits Of Using Bitcoin To Buy Gold Online

Bitcoin’s value skyrocketed in 2017, coinciding with the rapid ascent of the cryptocurrency’s popularity.

With more than 250,000 transactions taking place every day, it should come as no surprise that cryptocurrencies are increasingly being accepted as a form of payment everywhere, including in international markets. The following are just a few of the factors that contributed to the meteoric rise in popularity of Bitcoin.

Convenient – One of the most significant benefits provided by Bitcoin is the elimination of the need to visit a bank, open an account, and complete the necessary paperwork to carry out financial transactions. It enables you to send and receive payments from anywhere in the world without leaving the comfort of your own home.
Uninterrupted service — When formulating a plan for either your payment or your purchase, you will no longer need to take into account holidays and weekends. Because its underlying system is online around the clock and throughout the year, Bitcoin never takes a break.
Bitcoin transactions take a maximum of 24 hours to ensure transaction completion, whereas traditional international transactions can take up to several business days. As a result, Bitcoin transactions provide a method of online payment that is both quick and reliable.
Security Blockchain technology, which is what Bitcoin is based on, protects users’ identities while they use the cryptocurrency. On the distributed ledger network known as Blockchain, each user is essentially just a block whose identity is protected and secured by a robust encryption method.
Low transaction fees, in contrast to the high costs typically associated with traditional international financial dealings. Transactions using Bitcoin, on the other hand, do not. You will find that the fees associated with sending and receiving money from anywhere in the world are quite manageable. However, different application systems have different rates, so it is important that you do your research before selecting one.
Recognition on a global scale Despite the fact that not all nations accept the same currencies, Bitcoin is a cryptocurrency that is based on a digital model, so it is acknowledged all over the world. In a nutshell, it functions pretty much like a global currency that can be used pretty much anywhere in the world.

You are able to make purchases anywhere in the world without leaving the comfort of your own home, despite the fact that the currency is volatile and there is no transparency surrounding it. This makes it one of the most functional forms of currency. The simplicity of its design and the remarkable ease with which it can be utilized both contribute to the functionality of the product.

Is It Possible to Purchase Actual Gold Bars Using Bitcoin?

Not only is it possible to use Bitcoin to take part in bullion exchange and trade using Bitcoin, but you can also use Bitcoin to buy actual gold with Bitcoin.

As a result of the pandemic, many gold and silver suppliers have revised their business models to permit the purchase of physical gold over the internet or through other socially remote means.

You can use Bitcoin to make purchases on online marketplaces, such as for gold bars or biscuits, and the vendor will arrange for delivery of the item to your address as soon as the transaction can be completed online using Bitcoin.

When it comes to this part of the process, you need to make certain that the company you buy from has an excellent reputation in the market for removing the possibility of scams.

You will additionally be required to investigate their safety measures. You should make it a point to read reviews of the service to confirm that it does not have a history of having its security compromised.

If they do not have an adequate security system, you run the risk of losing all of your investment if cybercriminals are able to access your personal information and steal it. This includes your transaction password and account name, among other things.

Where Is The Best Place To Buy Gold Using Bitcoin?

There are a number of websites available online where you can use Bitcoin to make purchases of bullion and physical gold. Bitcoin is accepted as a form of payment by a variety of businesses, including GoldSilver, Vaultoro, Money metals, JM Bullion, Bitpanda Metals, APMEX, and Gold Money, to name just a few of them.

On the other hand, not all of these websites can be relied upon, and some of these provide significantly more value than others. We strongly suggest that you investigate Vaultoro.

VAULTORO

Vaultoro is a global corporation with offices located in both Berlin and London.

The company asserts that it is the first bullion trading company to accept cryptocurrency as payment for physical gold, and it calls itself the “first company of its kind.” Although we cannot state with absolute certainty whether or not they are telling the truth about their claim, we are aware that they provide their clients with exceptional service and a wide range of benefits.

2015 marked the beginning of Vaultoro’s business operations, and the company has quickly expanded into a multinational conglomerate. It is able to develop a global reach thanks to its mechanism for conducting trade online.

Due to the fact that the company facilitates peer-to-peer transactions, it is able to offer more competitive listing prices when compared to competing services. This is made possible by the elimination of the brokerage or middle man fee.

In addition to that, the company transports actual gold around the world. At this time, they send packages to a variety of locations, including parts of Asia, the United States, Canada, and the European Union. Despite this, the business intends to broaden its operations and start offering international shipping services.

In addition to this, they have the objective of broadening the scope of their asset classes by giving their clients investment opportunities in addition to gold.

When you sign up for Vaultoro, you are also given access to a secure vault that is provided by Brink’s and is maintained by that company. You will receive a monthly statement from Vaultoro if you choose to store your gold in one of their vaults. This will allow you to stay on top of your tax payments and keep a record of the value of your investment.

Create a wallet for your bitcoins.

At Bullion Exchanges, you can buy gold and silver using some of the money that is considered to be the safest for use on the internet. But before you use bitcoin to pay for anything, you need to keep the following in mind:

Choose a digital currency wallet.
Bitcoin will be used to fund it.

Any website or mobile application that allows you to store and manage your bitcoin currency is referred to as a “Bitcoin Wallet.” The wallet serves essentially the same purpose as a traditional bank account in that it enables you to receive, store, spend, and send bitcoins. On the website bitcoin.org, you’ll be able to find the official list of bitcoin wallets.

After you have successfully installed the Bitcoin Wallet of your choice, you will be provided with your Bitcoin Address as well as a Security Key. These will serve as your credentials whenever you send or accept Bitcoin payments. When you’ve finished setting up your Bitcoin wallet, you’ll be able to add Bitcoin to it. Bitcoin can be obtained through a variety of means, the most common of which are as follows:

Credit card or debit card: When you buy bitcoin using your credit card or debit card, the transaction will be instantly reflected in your digital wallet.
Purchase bitcoin with a bank transfer by linking your wallet to a bank account in the United States. Because bank transfers, unlike card transactions, require a certain period of time to process, adding funds to your bitcoin wallet using this method could take anywhere from one to four days.
Incoming Payment – You have the ability to receive bitcoin from other wallet holders as payment for goods or services.
Cash If you wish to instantly fund your bitcoin wallet, you can do so through the use of bitcoin ATMs if you have cash on hand.
Exchange Platforms: You are able to buy or trade large amounts of bitcoin at the current market rate on any of the exchange platforms that are currently available.

Keep in mind that while some methods of acquiring bitcoin can be completed immediately, others can take anywhere from a few hours to a few days. You should also be aware that there are fees associated with the exchange of bitcoins and/or the transaction of bitcoins, and you should take this into consideration before carrying out any transactions.

BUY GOLD WITH BITCOIN

You’ll be able to use bitcoin to buy gold as soon as its value is reflected in your wallet, which takes some time. Proceed to the checkout process after including any bullion products that catch your eye in the shopping cart, followed by the step of selecting “Bitcoin” from the list of accepted payment methods. After you have finished providing all of the information about your order, you will be redirected to the checkout page for BitPay, where you can finish the payment in one of the following ways:

Scanning the QR Code (Scan) – The invoice contains information that is encoded in a QR code, which you will need to scan using the app that you use for your Bitcoin wallet. Simply tap the “Approve” button when the invoice appears in your app, and the corresponding payment will be forwarded to Bullion Exchanges.
Sending a payment (Copy) entails accessing your wallet, filling in the displayed Bitcoin address along with the exact amount of bitcoins (BTC), and then sending the payment to Bullion Exchanges.

To ensure that the exchange rate is accurate, the invoice will only be active for a period of fifteen minutes. Following the submission of your payment, it could take up to 24 hours for your payment to receive the required six confirmations on the Bitcoin network.

Note: Each time you receive a confirmation, a new block will be added to the Blockchain. When a new block is constructed, it indicates that the previous blocks have been re-verified, and each block represents a set of new transactions that are completely unique to the bitcoin network. To be 99.9 percent certain that a transaction won’t be reversed, the standard recommendation is to obtain six confirmations, also known as blocks.

Considerations to Make Before Investing in a Cryptocurrency That Is Backed by Gold

Investing in gold-backed tokens comes with its fair share of benefits as well as potential drawbacks, just like any other industry. Let’s take a more in-depth look at both of these.

Advantages of Gold-Pegged Tokens

To begin, the vast majority of gold-backed tokens already exist as tokens that are built on the ERC-20 token standard. As a result, they can be easily transferred between users and traded on a variety of centralized and decentralized exchanges.

They get rid of the illiquidity of physical gold by enabling users to trade them whenever they want, provided that they have access to an exchange. One more advantage is that they can be divided and fractionalized, which gives investors the opportunity to own smaller portions of the whole and does not necessarily require them to put up a significant amount of capital.

In contrast to physical gold, gold-backed tokens come with additional advantages that are more commonly associated with cryptocurrencies, such as the fact that they are simple to store and exchange.

Decentralized exchanges may provide users with the opportunity to purchase gold-backed cryptocurrencies. Therefore, those who hold them are able to purchase them without undergoing any kind of KYC procedures (compared to CFDs and ETFs).

Disadvantages of Gold-Pegged Tokens

The fact that they are a derivative product adds another layer of potential danger to the situation. One of the disadvantages is that investors do not necessarily have direct ownership over the gold that their tokens are pegged to, although this might be different in certain projects that allow physical redemption.

Moreover, investors have no control over the storage of the actual gold that is used as collateral for the tokens because this responsibility is delegated to centralized service providers.

Due to the fact that the vast majority of them are ERC-20 tokens based on Ethereum, the gas fees associated with each purchase or transfer of the token could be quite expensive.

Gold-pegged cryptocurrencies are significantly less liquid than traditional gold contracts for difference (CFDs). This is due to the fact that the market for gold-pegged cryptocurrencies is significantly smaller than the market for legacy gold CFDs.

One more distinction between smart contracts and CFDs is the possibility of exploits being used on smart contracts. In spite of the fact that the odds of failure are extremely low here, smart contracts in general come with a probability that is not zero.

Leading Digital Currencies That Are Pegged to Gold

Only two of the cryptocurrencies that claim to be “pegged” to gold are interesting enough to warrant further investigation, despite the fact that there may be quite a few that make this claim. These two cryptocurrencies are known as Paxos Gold (PAXG) and Tether Gold (XAUT). Both of these tokens are issued by reputable companies that have a track record of success in the industry, and they both have a trading volume that is at least somewhat adequate. A red flag is raised by the fact that the remaining gold-backed cryptocurrencies are unable to deliver substantial liquidity, and the fact that their respective websites haven’t been updated in years.

Paxos Gold (PAXG)

Token symbol: PAXG

Market Cap (as of March 2022): $550 million

Top exchanges listed on: Binance, Uniswap, FTX, KuCoin, Kraken

As of the time this article was written, in March 2022, PAXG possesses the largest market cap of any gold-backed cryptocurrency, which is currently somewhere in the neighborhood of $550 million. Additionally, it has the highest average daily volume of trades.

“represents one fine troy ounce of physical gold from a specific serialised gold bar,” the official whitepaper for the project states that one PAXG token “represents one fine troy ounce of physical gold.” To add insult to injury, if a person possesses enough PAXG tokens to represent an entire gold bar, they are able to trade in their tokens for a real gold bar in exchange for their holdings.

The advantage of this is that ownership can be divided into units with up to 18 decimal points, making it possible for individuals to gain exposure to extremely minute amounts of gold. The fact that the token conforms to Ethereum’s ERC-20 token standard ensures that it can be moved around the network with relative ease.

It is also important to note that the Paxos Trust Company, which is the issuer of PAXG 0, is both a qualified custodian and a regulated financial institution. PAXG 0 is issued by this company. It is a state-chartered company that is regulated by the NYDFS, which stands for the New York State Department of Financial Services, and it is required to uphold the highest standards when it comes to protecting the assets of its customers. In addition to this, the NYDFS is in charge of regulating PAXG itself.

Tether Gold (XAUt)

Token symbol: XAUt

Market Cap (as of March 2022): $210 million

Top exchanges listed on: FTX, Bitfinex, Uniswap

Back in January 2021, CryptoPotato published an article stating that Tether, the company that is responsible for the most popular stablecoin (USDT), had introduced a new digital asset that was ticked XAUt. The token, which is based on the ERC-20 standard as well as Tron’s TRC-20 standard, also represents one troy fine ounce of gold on a London Good Delivery bar. Both standards were developed by Tron.

XAUt holders have the opportunity to acquire undivided ownership rights to gold on the specified gold bars if they choose to do so. Their allocation can be identified by a one-of-a-kind serial number, as well as by their weight and purity.

According to the documentation, holders of XAUt are also granted the ability to check the specifics of the gold bars that are linked to their addresses at any time through the website.

Users have to have finished the verification process that TG Commodities Limited requires in order to be able to make a redemption request for gold that is physically crafted. The tokens are distributed by this particular company. In any other case, the token can be traded on popular cryptocurrency exchanges like FTX and Bitfinex.

Should You Invest Your Bitcoins in Gold Instead?

Yes! And a double Yes! People are looking for investments that are secure as a result of the significant market instability that the pandemic has caused, and one such investment is gold.

Even though Bitcoin does not operate in the traditional sense, it is known to be quite volatile. Because of this, many people are selling their Bitcoin holdings during the pandemic and putting their money into gold instead.

When you buy gold with bitcoin, not only does it help you hedge your investment, but it also eliminates the risk of incurring significant losses in the event that the value of bitcoin drops.

In the event that you do not feel secure buying bullion and storing gold online, you can even use Bitcoin to purchase actual gold, which will free you from the necessity of going to conventional markets and shops during the pandemic.

Bitcoin is a cryptocurrency that is functional, widely recognized, and simple to use, and it offers a variety of advantages. The most important benefit is that it enables you to manage your investments in a risk-free and protected manner without having to leave the convenience of your own home.

It is one of the most functional forms of currency that has ever existed because you can use it to make investments and payments with low transaction rates at any time and in any location, making it one of the most functional forms of currency that has ever existed.

BUY PRECIOUS METALS WITH BITCOIN AT BULLION EXCHANGES

When it comes to making purchases of precious metals on our website, Bullion Exchanges is dedicated to providing customers with the easiest and most convenient payment methods possible. If you buy precious metals with bitcoin, you will receive a 1.5% discount off the price that you would pay with a credit card. As a result, you will pay a lower premium than if you were to choose to pay with a credit or debit card. Please refer to our Terms and Conditions for additional information regarding our Payment Options, or get in touch with us by calling (800) 852.6884 or sending an email to customerservice@bullionexchanges.com.